Bitcoin (BTC) is on track to outshine both gold and the NASDAQ, with historical evidence suggesting that the cryptocurrency thrives during monetary expansion. This year, gold has surged over 30%, while the NASDAQ has gained just 24.43%. In stark contrast, Bitcoin is leading the charge with impressive gains exceeding 52% so far. A Remarkable History Ecoinometrics, a crypto data provider, emphasizes the remarkable ability of BTC to excel in times of monetary growth. As major economies grapple with potential fiscal challenges, attention is shifting back to how Bitcoin reacts when fiat currencies lose value. A striking example of this was in 2020, when governments in the U.S. and across the globe flooded their economies with liquidity in response to the COVID-19 pandemic. During this period, Bitcoin significantly outperformed traditional assets, proving itself as a reliable hedge against inflation and currency devaluation. In the wake of the pandemic, central banks worldwide implemented extensive monetary measures. In the U.S. alone, the M2 money supply skyrocketed by an astonishing $6 trillion to address the economic fallout. A Change In Pace The analysis by Ecoinometrics also revealed that Bitcoin reaped substantial benefits via an influx of liquidity, achieving a compound annual growth rate (CAGR) of about 150%. This remarkable growth outpaced the NASDAQ, which saw a CAGR of less than 50%, and left gold trailing far behind. The Bitcoin CAGR was also nearly four times that of the NASDAQ and around 20 times greater than gold. Today, the economic environment seems to no longer be following the aggressive monetary expansion of 2020, with governments no longer increasing the money supply at the same rate. Consequently, BTC has shown signs of stabilization in recent months.
